CORE TERMS: membership, extortion, appointment, Hobbs Act, RICO Act, predicate, appointed, business agent, murder, salary, pattern of racketeering activity, aided, abetted, labor organization, predicate act, convicted, payoff, extorted, peace, election, intimidation, preponderance, incarceration, pension, aiding and abetting, racketeering, climate, reputed, interstate commerce, leadership
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HeadnotesCOUNSEL: Harvey Weissbard, Esq. (Argued), Weissbard & Wiewiorka, West Orange, New Jersey, Attorney for Appellants.
Edward A. Cohen, Esq. (Argued) Schneider, Cohen & Solomon, Jersey City, New Jersey, Attorney for Appellant Local Union No. 560.
W.H. Dumont, Esq. (Argued), United States Attorney, Ralph A. Jacobs, Esq., Chief, Appeals Division, Thomas L. Weisenbeck, Esq., Assistant U.S. Attorney, Leopold Laufer, Esq., Special Attorney, U.S. Department of Justice Claudia J. Flynn, Esq., Victor Ashrafi, Esq., Faith S. Hochberg, Esq., Assistant U.S. Attorneys, Newark, New Jersey, Attorneys for Appellee.
JUDGES: Garth and Becker, Circuit Judges, and Rosenn, Senior Circuit Judge.
OPINIONBY: GARTH
OPINION: [*269] OPINION OF THE COURT
GARTH, CIRCUIT JUDGE:
This appeal culminates a lengthy and complex civil action brought pursuant to [*270] the Racketeer Influenced and Corrupt Organizations ("RICO") Act, 18 U.S.C. §§ 1961, et seq., by the United States against several [**2] defendants who allegedly acquired an interest in, and effectively dominated, Local 560 of the International Brotherhood of Teamsters ("Local 560"). The district court, concluding that Local 560 was a "captive labor organization," enjoined certain defendants from any future contacts with Local 560, and removed the current members of the Local 560 Executive Board, replacing the Executive Board with a temporary trusteeship until free elections could be held. The district court's opinion appears at 581 F. Supp. 279 (D.N.J. 1984). The district court stayed its injunction pending appeal to this Court. We now affirm.
I.
On March 9, 1982, the government filed its civil complaint naming as defendants twelve individuals, Local 560, and Local 560's Welfare Fund and Severance Pay Plan. The government alleged that five of the named defendants: Anthony Provenzano, Nunzio Provenzano, Steven Andretta, Thomas Andretta and Gabriel Briguglio, were members of an ongoing criminal confederation -- the Provenzano Group n1 -- which, through acts of extortion and murder, effectively acquired an interest in, and control of, Local 560, an enterprise within the meaning of RICO, in violation [**3] of 18 U.S.C. § 1962(b). n2 The government also charged these defendants, as the Provenzano Group, with unlawfully participating, directly and indirectly, in the conduct of Local 560's affairs through a pattern of racketeering activity in violation of 18 U.S.C. § 1962(c) n3 and with conspiring to violate the above two provisions of RICO (§§ 1962(b) and (c)) in contravention of 18 U.S.C. § 1962(d). n4
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n1 Although not named as defendants by the government, the district court held that other past and present members of the Provenzano Group included Harold Konigsberg, Armand Faugno, Frederick Furino, Salvatore Sinno, Ralph Picardo, and Andrew Reynolds. App. at 62.
n2 18 U.S.C. § 1962(b) provides:
It shall be unlawful for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.
[**4]
n3 18 U.S.C. § 1962(c) provides:
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
n4 18 U.S.C. § 1962(d) provides:
It shall be unlawful for any person to conspire to violate any of the provisions of subsections (a), (b) or (c) of this section.
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Finally, the government charged the remaining seven individual defendants: Salvatore Provenzano, Joseph Sheridan, Josephine Provenzano, J.W. Dildine, Thomas Reynolds, Michael Sciarra, and Stanley Jaronko, who, at the time the suit was brought, constituted the Executive Board of Local 560, with aiding and abetting the Provenzano Group in violating 18 U.S.C. § 1962(b) and (d). n5
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n5 18 U.S.C. § 2 provides: "Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal."
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As stated above, the government avers that the Provenzano Group, aided and abetted by past and present members of the Executive Board of Local 560, violated 18 U.S.C. § 1962(b) by acquiring an interest in and control of Local 560 through a pattern of racketeering activity. The Provenzano Group's racketeering activity, the government argues, consisted of various acts of murder and extortion, the extortion element consisting of:
the wrongful use of actual and threatened force, violence and fear of physical and economic injury in order to create within Local 560 a climate of intimidation which induced the members thereof to consent to the surrender of certain valuable property in the form of their union [*271] rights as guaranteed by the provisions of Sections 157 and 411 of Title 29 of the United States Code [the Taft-Hartley Act, 29 U.S.C. § 157 and the Labor Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. § 411].
App. at 174A. Specifically, paragraph 12(a) of the Complaint alleged that The Provenzano Group extorted the membership's rights to vote, speak, and assemble freely [**6] by systematic acts of intimidation, including, as the district court summarized:
(1) the June 1961 murder of Anthony Castellitto; (2) the August 1961 appointment of Salvatore Provenzano to the position of Trustee formerly occupied by Castellitto; (3) the September 1961 appointment of Salvatore Briguglio -- the alleged murderer of Castellitto -- to the position of Business Agent; (4) the February 1963 appointment of Nunzio Provenzano to the position of Business Agent following his January 1963 conviction for extortion; (5) the May 1963 murder of Walter Glockner; (6) the 1964 appointment of Robert A. Luizzi to the position of Business Agent in spite of a record of criminal convictions; (7) the May 1967 appointment of Luizzi to the position of Trustee; (8) the February 1969 appointment of Salvatore Briguglio to position of Business Agent following completion of a term of imprisonment for extortion; (10) the 1970 appointment of Nunzio Provenzano to the position of Business Agent; (11) the 1971 appointment of Thomas Reynolds, Sr. to the position of Business Agent in spite of a record of criminal activity; (12) the 1972 appointment of Nunzio Provenzano to the position of Fund Trustee; [**7] (13) the 1972 appointment of Salvatore Briguglio to the position of Fund Trustee; (14) the allowance of frequent visitations by Armand Faugno and Thomas Andretta to the offices of Local 560; (15) the January 1963 appointment of Nunzio Provenzano to the position of Secretary-Treasurer; (16) the 1973 appointment of Reynolds to the position of Fund Trustee; (17) the 1974 resumption of duties as Business Agent by Salvatore Briguglio following completion of a term of imprisonment for counterfeiting; (18) the 1974 appointment of Luizzi to the position of Fund Trustee; (19) the November 1975 appointments of Anthony and Nunzio Provenzano to the positions of Secretary-Treasurer and President, respectively, in spite of a record of convictions for extortion; (20) the February 1977 appointment of Reynolds to the position of Trustee; (21) the July 1978 appointment of Josephine Provenzano to the position of Secretary-Treasurer following Anthony Provenzano's conviction for the Castellitto murder; (22) the July 1981 appointment of Salvatore Provenzano to the position of President following Nunzio Provenzano's forced resignation as a condition of bail on a labor racketeering conviction; (23) the Executive [**8] Board's failure to recover monies wrongfully converted by Anthony Provenzano; (24) the retention of Marvin Zalk as Fund Administrator in spite of payments accepted by him from an insurance company representative during the 1950's; (25) the retention of Ralph Torraco as the Fund's independent certified public accountant in spite of his federal indictment for systematically overbilling the Fund; (26) the extortion of contributions to the defense funds of the Provenzanos and Michael Sciarra from union members; (27) the 1981 appointment of Luizzi to the position of Business Agent; and (28) associations by some of the defendants with Frank "Funzi" Tieri and Matteo Alfredo Ianniello, reputed to be organized crime members.
App. at 10-12.
In addition to committing acts of murder and extortion for the purpose of dominating Local 560, the individual members of the Provenzano Group, according to the government's complaint, allegedly committed several other illegal acts in its participation in the conduct of the affairs of the Local 560 enterprise in violation of 18 U.S.C. § 1962(c). The predicate illegal acts [*272] which comprised the Provenzano Group's [**9] "pattern of racketeering activity" under § 1962(c) as alleged in the government's Complaint were summarized by the district court as follows:
(1) the extortion of $17,000 from Walter Dorn and his company (Dorn Transport, Inc. of Rensselaer, New York), in return for "labor peace"; (2) the wrongful conversion by defendant Anthony Provenzano, aided and abetted by successive defendant members of the Local 560 Executive Board of approximately $223,785 in Local 560 funds "by means of false and fraudulent pretenses, representations, and promises, and pursuant to a scheme and artifice to defraud. . .;" (3) the wrongful receipt by Provenzano Group members of payments, loans and other things of value from certain employers (Interocean Services, Inc. and Di-Jub Leasing, Inc.) in exchange for "labor peace"; (4) the unlawful receipt by defendant Anthony Provenzano, aided and abetted by Salvatore Briguglio, of certain fees, kickbacks, gifts or things of value in the form of certain Florida real estate because of, and with intent to be influenced with respect to, his actions and decisions relating to the Benefit Fund; and (5) the wrongful receipt by defendant Nunzio Provenzano, together [**10] with Irving Cotler and others, as associates of the Provenzano Group, of "labor peace" payments by certain employers, specifically Pacific Intermountain Express Company, Mason and Dixon Lines, Inc., T.I.M.E. -- DC, Inc. and Helms Express.
App. at 13.
In its demand for relief, the government sought only injunctive and equitable remedies. The government asked that the district court (1) enjoin Anthony Provenzano, Nunzio Provenzano, Stephen Andretta, Thomas Andretta, and Gabriel Briguglio (the members of the Provenzano Group) from having any dealings, directly or indirectly, with any officer or employee of the Local 560 enterprise or any other labor organization or employee benefit plan; (2) enjoin Salvatore Provenzano, Joseph Sheridan, Josephine Provenzano, J.W. Dildine, Thomas Reynolds, Sr., Michael Sciarra, and Stanley Jaronko (the members of the Executive Board) from acting in any official capacity for or on behalf of Local 560 or its funds; (3) appoint one or more trustees to discharge all duties and responsibilities of the Executive Board of Local 560 until such time as free elections can be held; and (4) after the membership participation in a free election, permanently [**11] enjoin all individual defendants from having any future dealings of any nature whatsoever, directly or indirectly, with any officer, agent, representative, or employee of Local 560 or any other labor organization.
Before trial, the government entered into consent orders with defendants Anthony Provenzano, Nunzio Provenzano, and Thomas Andretta. The consent orders bar these three defendants from, among other things, (1) associating with any enterprise (within the meaning of 18 U.S.C. § 1961) which seeks to dominate, control, or otherwise influence the affairs of any labor organization or any employee benefit plan and (2) acting as an officer, organizer, administrator, or representative for any labor organization or any employee benefit plan. In exchange, the government agreed to "not pursue any further civil claims against the defendants based upon the transactions which are specifically enumerated in the Verified Complaint . . . ." App. at 164A. Accordingly, pursuant to these consent orders, Anthony Provenzano, Nunzio Provenzano, and Thomas Andretta were removed as defendants prior to trial.
On November 1, 1982, prior to trial, the district court denied [**12] Local 560's 12(b)(6) motion to dismiss paragraph 12(a) of the government's complaint for failure to state a cause of action. United States v. Local 560, 550 F. Supp. 511 (D.N.J. 1982). Paragraph 12(a), as previously noted, charged the Provenzano Group and the Executive Board with extorting members' rights to vote, speak, and assemble. The district court held that the extortion of intangible rights guaranteed to union members by the LMRDA's Bill of Rights, 29 U.S.C. § 411, [*273] constituted a violation of the Hobbs Act, 18 U.S.C. § 1951, and thus, would properly serve as a predicate act under RICO. The district court also rejected Local 560's argument that the LMRDA remedies are the exclusive remedies available in combatting the extortion of member's rights under that statute.
On January 25, 1983, the bench trial of this cause commenced. The trial lasted until May 17, 1983, comprising 51 days of testimony. On March 16, 1984, the district court entered its final order, granting the government's requested injunctive relief in all respects. At the same time, the district court withheld the appointment of a trustee [**13] because it stayed its order pending appeal. See Fed. R. Civ. P. 62. All of the defendants except alleged Provenzano Group members Stephen Andretta and Gabriel Briguglio filed timely notices of appeal.
II.
The district court's analysis of the defendants' RICO Act violations in the instant case differed from the analysis on which the government's Complaint was based. The government's complaint referred to Local 560 as the "enterprise" for both its section 1962(b) and (c) counts. Thus, the government alleged in its complaint that the individual associates of the Provenzano Group violated 18 U.S.C. § 1962(c) by participating in the conduct of the affairs of the Local 560 enterprise through a pattern of racketeering activity. Although the district court made findings consonant with this theory, it also held that the individual members of the Provenzano Group violated 18 U.S.C. § 1962(c) by unlawfully participating in the conduct of the affairs of the Provenzano Group (not Local 560), which the district court held was the "enterprise" for purposes of 18 U.S.C. § 1962(c).
In addition, although the [**14] government initially alleged separate and distinct predicate criminal offenses under sections 1962(b) and 1962(c), the district court held that there were several predicate offenses committed by the Provenzano Group members which served as the underlying predicate acts for both the section 1962(b) and section 1962(c) counts. Specifically, the district court, while attributing other predicate acts to either 1962(b) or 1962(c), see, e.g., n.6, infra, held that the following crimes, among others, constituted predicate acts under both of the above subsections of the RICO Act:
(1) Dorn: Between approximately January 1, 1952 and June 1, 1959, Anthony Provenzano (leader of the Provenzano Group), while an official of Local 560, extorted payoffs from Walter Dorn and his company, Dorn Transport, Inc., in exchange for "labor peace." Anthony Provenzano was subsequently convicted on one count of Hobbs Act extortion under 18 U.S.C. § 1957 for his part in the Dorn labor peace payoffs. App. at 24, 69.
(2) Castellitto: In 1961, Anthony Provenzano recruited Harold Konigsberg and Salvatore Briguglio to kill Anthony Castellitto, who was a popular member [**15] of Local 560 and who posed a threat to Anthony Provenzano's control of the union. On June 6, 1961, Konigsberg, Briguglio, Salvatore Sinno, and others, committed the murder. Salvatore Briguglio was killed while under indictment for the Castellitto murder, and on June 21, 1978, Anthony Provenzano was sentenced to life imprisonment for his part in the murder of Castellitto. App. at 24-25, 30, 70-71.
(3) Braun: Between November 30, 1961 and December 12, 1961, Nunzio Provenzano and Salvatore Briguglio attempted to extort labor peace payments (the Braun Payoff Demand case) from the Braun Company in violation of New York Penal Law § 560 and § 1294 (Conspiracy and attempted grand larceny). Nunzio Provenzano and Salvatore Briguglio were convicted and incarcerated for approximately 2-1/2 years in New York. App. at 25-26, 29, 69.
(4) Seatrain: Between December of 1969 and June of 1977, Anthony Provenzano, Stephen Andretta, Thomas Andretta, [*274] and Gabriel Briguglio unlawfully received "labor peace" payoffs from Interocean Services, Inc. and Di-Jub Leasing Inc. (Seatrain Labor Peace Payoffs) in violation of 18 U.S.C. § 186(b). Anthony Provenzano and [**16] Thomas Andretta each received 20 years imprisonment for their part in the Seatrain payoffs, and Stephen Andretta and Gabriel Briguglio received 10 and 7 years imprisonment, respectively. App. at 22-23, 25, 28, 77.
(5) Romano: Between 1974 and 1977, Anthony Provenzano, aided and abetted by Salvatore Briguglio and Stephen Andretta, received kickbacks in connection with loans made by the union's Passaic and Bergen Funds to Thomas and Frank Romano in violation of 18 U.S.C. § 1954. App. at 77-82.
(6) City-Man: Between January of 1971 and July of 1980, Nunzio Provenzano, Irving Cotler, and other individuals unlawfully received labor peace payoffs (the City-Man payoffs) from Pacific Intermountain Express Company, Mason and Dixon Lines, Inc. T.I.M.E. - DC, Inc., and Helms Express in violation of 28 U.S.C. § 186(b). On May 5, 1981, Nunzio Provenzano was convicted on RICO charges stemming from these City-Man labor peace payoffs and was sentenced to 10 years imprisonment. App. at 26, 82-83.
Although the district court concluded that the crimes recounted above constituted predicate acts for purposes of both sections 1962(b) [**17] and 1962(c), the district court also held that the Provenzano Group's extortion of the LMRDA rights of union members -- which was the only predicate act aided and abetted by the Local 560 Executive Board defendants -- was a predicate act only for purposes of section 1962(b). n6
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n6 Since the Provenzano Group, aided and abetted by the Executive Board, extorted LMRDA rights of Local 560's membership for the purpose of "acquiring an interest in and control of" the Local 560 enterprise, the extortion of membership rights was properly designated as a section 1962(b) act.
The district court held, as well, that certain crimes committed by the Provenzano Group were predicate acts only for purposes of section 1962(c). For example, the district court noted that the Middlesex County Loansharking Transaction committed in March of 1967 by Thomas Andretta and Armand Faugno in violation of New Jersey law and the Skil Tool Theft committed in 1968 by Thomas Andretta and Frederick Salvatore Furino in violation of 18 U.S.C. § 659, were racketeering activities relevant only to section 1962(c) of the RICO Act. App. at 76.
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The district court held that the extortion of the membership's democratic rights in violation of the Hobbs Act, 18 U.S.C. § 1951, was accomplished by fostering a general climate of intimidation within Local 560. The district court stated that the failure to develop any political opposition to the leadership of Local 560 during the past 20 years demonstrated this climate of intimidation. The district court identified several discrete actions taken by the Provenzano Group and the Executive Board of Local 560 which helped nurture this climate of intimidation, and which resulted in numerous instances of extortion.
The actions taken by the Provenzano Group and the Executive Board, as found by the district court, included (1) the repeated appointments of convicted criminals and persons reputed to be involved in criminal activity to positions of trust and responsibility within Local 560; (2) the expenditure of Local 560 assets in the form of increased salary and pension benefits to Anthony Provenzano, who has committed three criminal offenses while a member of Local 560's Executive Board; (3) permitting the presence of convicted criminals and reputed criminals [**19] in the offices of Local 560; and (4) the failure of the Executive Board to counter perceptions on the part of Local 560's membership that it was unwise for the members to voice dissatisfaction with Executive Board policy.
III.
We address first the issue which concerns both the Provenzano Group defendants and the Executive Board defendants: namely, whether the district court properly [*275] found a violation of section 1962(b) of the RICO Act. The district court held that the Provenzano Group members, aided and abetted by the Executive Board, acquired an interest in and control of Local 560 through a pattern of racketeering activity. See 18 U.S.C. § 1962(b) n.2 supra.
Central to the district court's section 1962(b) analysis is its finding that the Provenzano Group and the Executive Board extorted the membership's LMRDA rights to democratic participation in their union's affairs. LMRDA rights apply to every member of a labor organization. These rights include the right to nominate Union leaders; to vote in union elections; to meet and assemble freely with other members; and to express any views, arguments, or opinions at union meetings. 29 U.S.C. § 41 [**20] (a)(1) & (2) provides:
(a)(1) Equal rights. -- Every member of a labor organization shall have equal rights and privileges within such organization to nominate candidates, to vote in elections or referendums of the labor organization, to attend membership meetings, and to participate in the deliberations and voting upon the business of such meetings, to participate in the deliberations and voting upon the business of such meetings, subject to reasonable rules and regulations in such organization's constitution and bylaws.
(2) Freedom of speech and assembly. -- Every member of any labor organizations shall have the right to meet and assemble freely with other members; and to express any views, arguments, or opinions; and to express at meetings of the labor organization his views, upon candidates in an election of the labor organization or upon any business properly before the meeting, subject to the organization's established and reasonable rules, pertaining to the conduct of meetings: Provided, That nothing herein shall be construed to impair the right of a labor organization to adopt and enforce reasonable rules as to the responsibility of every member toward the organization [**21] as an institution and to his refraining from conduct that would interfere with its performance of its legal or contractual obligations.
Indeed, it is upon these predicate acts of extortion that the district court based its finding of liability.
A.
(1)
As a threshold matter, there are certain evidentiary questions which this court must resolve that bear upon the extortion of LMRDA rights. At trial, the government, in attempting to prove that the Provenzano Group and the Executive Board of Local 560 extorted the LMRDA rights of union members, submitted various proofs to establish that many union members were fearful of exercising their statutory right to participate in the affairs of Local 560. As part of these proofs, the government sought to admit into evidence numerous newspaper and magazine articles, n7 spanning a twenty-year period, which reported the criminal activities of Provenzano Group members. The government argued that these articles were relevant and admissible, not to demonstrate the truth of the statements in the articles, but to demonstrate the perceived reputation of Provenzano Group members in the community.
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n7 These articles were from the New York Daily News, the Hudson Dispatch, Life Magazine, the Newark Evening News, the New York Post, the New York Times, The Bergen Record, the Newark Star Ledger, the Wall Street Journal, and Time Magazine.
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The government further maintained that it was proper for the district court to infer that these articles were read by Local 560's membership and that the reputation of the Provenzano Group members intimidated the membership into surrendering their LMRDA rights. The district court, adopting the government's position, admitted the newspaper and magazine articles into evidence, n8 holding that "it may be a fair inference [*276] that the members kept abreast of certain events and that having read these articles they feared violence or economic retaliation if they exercised their LMRDA rights." App. at 1400.
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n8 The district court did not admit into evidence all of the articles submitted by the government. The district court, for example, disallowed articles that did not contain specific references to Local 560 or Provenzano Group members, and also excluded articles from Philadelphia papers on the basis that there was an insufficient number of Local 560 members who lived within the general circulation area of those papers.
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The defendants argue that the district court improperly admitted these newspaper accounts into evidence for reputational purposes. Specifically, the defendants maintain that the government did not establish a sufficient foundation to allow in this evidence: namely, that the government did not introduce evidence, along with these articles, to indicate that members of Local 560 actually read the articles in question, and as a result of reading the articles, had developed a fear of the leadership of Local 560.
The district court, in admitting the evidence, relied principally on Webb v. Fuller Brush Co., 378 F.2d 500 (3d Cir. 1967). In Webb, the plaintiffs brought a products liability tort suit for injuries sustained from using a facial hormone cream sold to the plaintiffs by the defendant. At trial, the plaintiffs sought to introduce articles discussing the dangers of certain hormones. The trial court disallowed the evidence. This Court reversed, holding that, since the defendant had a duty to warn of the dangers of the face cream if it knew or should have known that the product could be injurious, the articles were admissible for the purpose of proving whether [**24] the defendant should have alerted the plaintiffs to possible hazards. Although, in Webb, this court did not discuss the foundation necessary for the introduction of the articles, presumably, the plaintiffs there demonstrated that the articles were in a publication that the defendant, at the very least, should have been reading. n9
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n9 The government also argues that United States v. Blane, 375 F.2d 249 (6th Cir.), cert. denied, 389 U.S. 835, 19 L. Ed. 2d 96, 88 S. Ct. 41 (1967) supports the district court's decision to admit the articles into evidence. However, we note that in Blane, the newspaper articles were not submitted into evidence, and were used only to cross-examine reputational witnesses.
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In the instant case, unlike in Webb, in order for the articles to be admitted into evidence it must have been demonstrated, not that the members of Local 560 should have read the articles in question, but that members of Local 560 actually read these articles. [**25] The government at trial, however, did not develop this necessary foundation. Indeed, only one Local 560 member testified that he had ever read anything in the papers about the Provenzano Group and Local 560. August Muller, a Local 560 member who had been assaulted by Executive Board member Stanley Jaronko, stated that "in the papers it said that there was an argument involved the prior night, and the man [Glockner] was dead the next morning. . . I don't want anything to happen to me. . . ." App. at 7668. We hold that this isolated reference to a single newspaper article afforded an insufficient foundation for the admission into evidence of several articles covering a period of twenty years.
(2)
Another evidentiary question involving the extortion of membership rights concerned the testimony of Raymond Wren. Wren, a Special Agent of the Department of Labor, testified at trial as to the reputation for violence and economic retribution of several former and current members of the Executive Board of Local 560. Wren based his testimony on interviews he had with 15 former and current members of Local 560. The defendants argue that the district court abused its discretion in admitting [**26] Wren's testimony because Wren did not base his testimony on a random sample of the Local 560 members, but rather interviewed only members whom he knew to be opponents of the Provenzano Group and the current Executive Board of Local 560. The government, on the other hand, argues that the validity of Wren's "sample" goes only to the weight of his testimony, and not to its admissibility.
[*277] We recognize that, in modern, complex litigation, investigative and research surveys may be properly admitted into evidence for a variety of purposes. Indeed, in United States v. 88 Cases, etc., 187 F.2d 967 (3rd Cir.), cert. denied, 342 U.S. 861, 96 L. Ed. 648, 72 S. Ct. 88 (1951), this Court held that a scientific survey of 3539 individuals was admissible as evidence. We concluded that the survey was not hearsay because it was used, not to prove the truthfulness of the numerous responses, but rather to prove the reaction of the general public. We further held that "the technical adequacy of the surveys was a matter of the weight to be attached to them." Id at 974.
Here, however, we have a different situation. Contrasted with the random [**27] sampling of individuals in 88 cases, in this case, no attempt was made to establish a scientific basis for the selection of individuals interviewed. Indeed, Wren, himself, admitted that his "survey" did not comport with accepted survey techniques. App. at 663.
In the instant case, Wren's testimony was introduced to prove the reputation of past and present members of the Executive Board as perceived by the membership of Local 560. However, as we have noted, Wren did not engage in a scientific, random survey of Local 560's membership. Instead, as Wren conceded at trial, he approached only those past and present members of Local 560 whom he knew to be hostile to the leadership of Local 560. n10 Such an approach, by its very nature, is suspect because of its biased and selective character. Wren's one-sided sampling did no more than represent the opinion of a few, known opponents of the Local 560 membership. Although the membership in general may have subscribed to the same opinions as those expressed by Wren's 15 interviewees, Wren's survey technique was not designed to, nor did it, record the impressions of the membership at large. See Pittsburgh Press Club v. United States, 579 F.2d 751, 758 (3d Cir. 1978) [**28] ("A proper universe must be examined and a representative sample must be chosen" for a survey to be trustworthy.) (emphasis in original).
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n10 Wren obtained these names of members or former members of Local 560 mainly from the Department of Labor personnel who had been involved in the investigation of the Local 560 1982 election, and in supervising the 1965 election. All the individuals selected for interviews by Wren had been political opponents of the Provenzano Ticket in the 1960's.
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While, in normal course, a research survey conducted in accordance with accepted standards of sampling may be admitted into evidence to be then tested for its weight, where a survey is offered that has met no such standards and, indeed, where that survey is conceded to have been deliberately partisan in its limited sampling, the prejudicial effect of such a flawed survey substantially outweighs any probative value it may have. See Fed. R. Evid. 403. In such an instance, admissibility must be denied and weight cannot [**29] be attributed to testimony of this nature. Because Wren's testimony was predicated on such a flawed survey, we conclude that the district court abused its discretion in admitting Wren's testimony into evidence. n11
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n11 The government relies on language which appears in United States v. Lewin, 467 F.2d 1132, 1140 (7th Cir. 1972) for the proposition that "systematic inquiry by a person coming from outside will often be a better source of knowledge than the casual opportunities of a neighbor or a friend." (quoting III Wigmore, Evidence § 692 at 22 (Chadbourn rev. 1970). However, the text in Wigmore, although not quoted in Lewin, continues: "the only reason for distrust exists when the inquirer. . . seeks evidence of one purport only." In the instant case, Wren sought evidence of only one purport.
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Thus far, we have held that the district court abused its discretion by admitting into evidence: (1) the newspaper and magazine articles and (2) Wren's testimony. Both of these evidentiary submissions [**30] were offered to prove that the rank and file of Local 560 was fearful of their union leadership. The government's contention is that, by establishing a climate of fear within Local 560, the Provenzano Group and the Executive Board of Local 560 were able to [*278] extort the membership's LMRDA rights in violation of the Hobbs Act, 18 U.S.C. § 1951.
(3)
The question remains, however, whether the admission of this evidence by the district court was fatal to the government's charges, or whether the district court, in erring, committed error which was harmless. As this court held in DeLaval Turbine, Inc. v. West India Industries, Inc., 502 F.2d 259, 263-64 (3d Cir. 1974), "it is well settled that in a non-jury case, an appellate court will not reverse on the basis of an erroneous admission of evidence unless (1) there is insufficient evidence other than the challenged evidence to support the district court's conclusion, or (2) the district court is induced by the challenged evidence to make an essential finding that it would not have made otherwise." Accordingly, in the instant case, we must determine whether there exists sufficient evidence [**31] in the record (apart from the newspaper and magazine articles and Wren's testimony) to support the district court's conclusion that the rights of Local 560's rank and file were extorted.
It was on the basis of several sources that the district court concluded that the Provenzano Group and the Executive Board extorted the LMRDA rights of a substantial segment of Local 560's membership. Of these sources, one of the most prominent was the testimony of Professor Clyde Summers.
Professor Summers, who has specialized in labor law since 1943, testified as an expert witness for the government. According to Professor Summers, a significant proportion of Local 560's rank and file were induced by fear of the Provenzano Group to surrender their membership rights. Summers' conclusion that the membership did not feel free to criticize openly the policies and practices of the Local 560 leadership (and, thus, were fearful of exercising their union democratic rights) was based primarily on the observation that, throughout the history of Local 560, incidents which should have raised criticism of Local 560's leadership among its membership, did not. Among the incidents which Summers' believed should [**32] have spurred membership reaction were: the murder of Walter Glockner the morning after his public display of opposition at a union meeting; the many convictions of union officials on union-related offenses; the failure of the Executive Board to take any action when an official was indicted; the appointment and reappointment of persons who had been convicted of union related offenses; the payment of salary increases to Anthony Provenzano; the appointment of Anthony's daughter, Josephine Provenzano, to the office of Secretary-Treasurer of the union following Anthony's incarceration; and the proposal to pay Anthony Provenzano a one-half salary pension despite his conviction for the murder of Anthony Castellitto. As Professor Summers testified, "It is beyond belief that 10,000 members would sit by and watch these things done and never utter a peep," unless a substantial number of the membership were fearful for their lives or their jobs. App. at 1608.
The district court accepted Summers' testimony as convincing, and we agree. There seems to be no other plausible explanation for the silence of Local 560's membership in the face of repeated outrageous events. The district court, placing [**33] an emphasis on Summers' testimony, found that the silence was due to the repressive atmosphere of Local 560, an atmosphere created and maintained by the Provenzano Group and the Executive Board. We cannot characterize such a finding as clearly erroneous.
In addition to the testimony of Professor Summers, the district court, in determining that the membership's rights had been extorted, also relied on the testimony of August Muller. Muller, an employee of Maislin Brothers Trucking Company and a member of Local 560, testified at trial that, at a general membership meeting in 1983, he heard Salvatore Provenzano state that Maislin would soon be out of business because the International Brotherhood of Teamsters would insist that Maislin repay [*279] certain monies which Teamster employees had loaned the company. After hearing Salvatore Provenzano's warning, Muller testified that Local 560 Business Agent Stanley Jaronko went to the Maislin terminal to hold a meeting and speak to the drivers. At this meeting, Muller challenged Jaronko about the statements Salvatore Provenzano had made earlier at the general membership's meeting. The exchange between Muller and Jaronko became increasingly [**34] heated, and Jaronko ultimately struck Muller, sending him into a wall. It was after this altercation that Muller recalled the shooting death of Walter Glockner, which occurred the morning after Glockner had voiced opposition to Local 560's leadership at a general meeting.
At trial, Muller was called to testify about the incident. The district court observed that: "Throughout his direct and cross-examination, Muller's demeanor evinced the precise attributes of a man in the grip of extreme fear or even sheer terror because of what he was being compelled to say publicly." App. at 89 (emphasis added). Professor Summers' testimony indicated that Muller's feelings and fears were shared by a large percentage of Muller's compatriots. App. at 1608. As the district court noted, Muller's testimony dramatically illustrated the climate of fear within Local 560 and served to support and reinforce Professor Summers' conclusion that the membership's LMRDA rights to democratic participation in Local 560 were extorted through intimidation and fear.
Accordingly, we believe that the district court was not clearly erroneous in finding that the Provenzano Group and the Executive Board had extorted [**35] the LMRDA rights of a substantial number of Local 560 members. This finding, predicated on Professor Summers' and Muller's testimony, does not depend on the evidence erroneously admitted, namely the newspaper articles and Wren's survey. Hence, under the DeLaval, supra, standard, even though the district court may have erred in admitting these two categories of evidence, that error was harmless and the district court's finding, based on evidence independent of the challenged evidence, must be sustained. See also Anderson v. City of Bessemer, 470 U.S. 564, 105 S. Ct. 1504, 84 L. Ed. 2d 518 (1985).
B.
The district court not only found by a preponderance of the evidence n12 that the [*280] Provenzano Group and the Executive Board extorted the membership's LMRDA rights, but also concluded that such extortions constituted predicate acts for purposes of section 1962(b) of the RICO Act, 18 U.S.C. 1962(b). n13 United States v. Local 560, 550 F. Supp. 511 (D.N.J. 1982). Section 1962(b) makes it unlawful for any person to maintain an interest in, or control of, any enterprise through a pattern of "racketeering [**36] activity." Section 1961(1) of the RICO Act, in relevant part, defines "racketeering activity" as "any act which is indictable under . . . section 1951 [of title 18: the Hobbs Act] (relating to interference with commerce, robbery, or extortion). . . ." Thus, in the instant case, the question is whether the extortion of the membership's LMRDA rights constitutes a Hobbs Act violation so as to satisfy the predicate act requirement of section 1962(b) of the RICO Act.
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n12 We agree with the district court that the appropriate burden of proof for the government in a civil action under the RICO Act (where remedies are sought pursuant to 18 U.S.C. § 1964) is the "preponderance of the evidence" standard and not, as the defendants contend, the "beyond a reasonable doubt" or "clear and convincing evidence" standard. App. at 124-27. In holding that "preponderance" was the proper standard, the district court utilized the three-part balancing test articulated in Santosky v. Kramer, 455 U.S. 745, 754, 71 L. Ed. 2d 599, 102 S. Ct. 1388 (1982).
The Kramer Court, in determining whether a particular standard of proof in a particular proceeding satisfies due process, evaluated three factors: (1) the private interests affected by the proceeding; (2) the risk of error created by the state's chosen procedure; and (3) the countervailing government interest supporting use of the challenged procedure. In the instant case, the district court chose the "preponderance" standard in the instant case because (1) the defendants faced neither the prospect of criminal sanction nor the imposition of significant liberty deprivations and (2) the nature of the relief sought was equitable and remedial in nature, not punitive. In adopting the "preponderance" standard, the district court joined the majority of courts which have addressed this issue. See e.g., United States v. Cappetto, 502 F.2d 1351, 1358 (7th Cir. 1974), cert. denied, 420 U.S. 925, 43 L. Ed. 2d 395, 95 S. Ct. 1121 (1975); Farmers Bank of Delaware v. Bell Mortgage Corp., 452 F. Supp. 1278, 1280 (D. Del. 1978); Heinold Commodities, Inc. v. McCarty, 513 F. Supp. 311, 313 (N.D. Ill. 1979).
Subsequent to the filing of the district court's opinion, the Supreme Court decided two cases which bear directly on this issue and which add further support for adopting the "preponderance" standard in civil actions brought under the RICO Act. In Herman & MacLean v. Huddleston, 459 U.S. 375, 74 L. Ed. 2d 548, 103 S. Ct. 683 (1983), the Supreme Court held that the normal civil standard of proof applies in civil fraud actions brought under section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78j(b). The language in Huddleston mandates the "preponderance" standard in all but a few civil cases. The Huddleston Court, in surveying this area of the law, stated:
Thus, we have required proof by clear and convincing evidence where particularly important individual interests or rights are at stake. See, e.g., Santosky v. Kramer, 455 U.S. 745, 71 L. Ed. 2d 599, 102 S. Ct. 1388 (1982) (proceeding to terminate parental rights); Addington v. Texas, supra (involuntary commitment proceeding); Woodby v. INS, 385 U.S. 276, 17 L. Ed. 2d 362, 87 S. Ct. 483(1966) (285-286) (deportation). By contrast, imposition of even severe civil sanctions that do not implicate such interests has been permitted after proof by a preponderance of the evidence. See, e.g., United States v. Regan, 232 U.S. 37, 48-49, 58 L. Ed. 494, 34 S. Ct. 213 (1914) (proof by a preponderance of the evidence suffices in civil suits involving proof of acts that expose a party to a criminal prosecution). Thus, in interpreting a statutory provision in Steadman v. SEC, supra, we upheld use of the preponderance standard in SEC administrative proceedings concerning alleged violations of the antifraud provisions. The sanctions imposed in the proceedings included an order permanently barring an individual from practicing his profession. And in SEC v. C.M. Joiner Leasing Corp., 320 U.S. at 355, we held that a preponderance of the evidence suffices to establish fraud under § 17(a) of the 1933 Act.
Id. at 389-90.
Even more on point is the Supreme Court's decision in Sedima v. Imrex Co., Inc. 473 U.S. 479, 105 S. Ct. 3275, 87 L.Ed 2d 346 (1985), where the Court held that proof of racketeering-type activity was not required to establish a RICO predicate act. Although the Court in Sedima did not reach the burden of proof issue, it nevertheless held:
We are not at all convinced that the predicate acts must be established beyond a reasonable doubt in a proceeding under § 1964(C). In a number of settings, conduct that can be punished as criminal only upon proof beyond a reasonable doubt will support civil sanctions under a preponderance standard. There is no indication that Congress sought to depart from this general principle here. That the offending conduct is described by reference to criminal statutes does not mean that its occurrence must be established by criminal standards or that the consequences of a finding of liability in a private civil action are identical to the consequences of a criminal conviction.
105 S. Ct. at 3282-83 (citations omitted).
Reviewing the Supreme Court opinions in Santosky, Huddleston, and Sedima, we are satisfied that the preponderance standard applies in civil RICO litigation. While we recognize that the defendants in such actions have significant interests at stake (i.e., financial, occupational, and reputational), these interests are not sufficiently compelling to trigger a more stringent burden of proof. [**37]
n13 The defendants argue that the Attorney General's jurisdiction under RICO in the instant case is pre-empted by sections 481-483 of the LMRDA, 29 U.S.C. §§ 481-483. They maintain that, since the district court inferentially found that Local 560's elections since 1968 have been illegal, the Attorney General could not pursue a RICO claim because the LMRDA, 29 U.S.C. §§ 481-483, provides the exclusive remedy by which an election can be set aside.
This argument has little merit. Contrary to the defendants' contention, the government initiated this suit, not to invalidate any particular election, but to eliminate entirely the union's racketeering element. The RICO Act and sections 481 through 483 of the LMRDA were designed to combat entirely different offenses, and as such, the LMRDA cannot be pre-emptive. Moreover, we note that RICO was enacted in 1970, eleven years after the LMRDA, and was intended, in part, to supplement the protections already afforded union members.
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The Hobbs Act, 18 U.S.C. § 1951, n14 prohibits the [**38] obstruction or interference with [*281] commerce by use of threats or extortion. This court has held that the primary elements of a Hobbs Act violation are that (1) that the defendants induce their victims to part with property; (2) that the defendants do so through the use of fear; and (3) that, in so doing, the defendants adversely affect interstate commerce. n15 United States v. Addonizio, 451 F.2d 49, 59 (3d Cir. 1971), cert. denied, 405 U.S. 936, 30 L. Ed. 2d 812, 92 S. Ct. 949 (1972).
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n14 18 U.S.C. § 1951(a) provides:
Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined not more than $10,000 or imprisoned not more than twenty years, or both.
n15 In United States v. Cerilli, 603 F.2d 415, 424 (3d Cir. 1979), cert. denied, 444 U.S. 1043, 62 L. Ed. 2d 728, 100 S. Ct. 728 (1980), this Court held that, to satisfy the "affect on interstate commerce" requirement, all that need be shown is "proof of a reasonably probable effect on commerce, however minimal, as [a] result of the extortion." The defendants argue that there was no evidence that the extortion of union members' intangible property rights (LMRDA rights) had any affect on interstate commerce. We disagree.
Put simply, the actions of Local 560 affected interstate commerce because Local 560 entered into collective bargaining agreements with businesses directly engaged in interstate commerce. Thus, when membership rights to democratic participation in that union were extorted, the actions of Local 560 were affected, which, in turn, resulted in affecting interstate commerce through businesses involved in interstate commerce. Accordingly, the district court was not clearly erroneous in finding that the extortion of membership rights affected, in some minimal way, interstate commerce.
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(1)
The defendants initially argue that the membership's LMRDA rights are intangible property rights, and as such, cannot be the basis for a claim of extortion under the Hobbs Act. Defendants maintain that only the extortion of tangible property (i.e. physical items or possessions) can be cognizable as a Hobbs Act violation.
However, the language of the Hobbs Act makes no such distinction between tangible and intangible property. Section 1951(b)(2) broadly defines "extortion" as "the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force. . . ." Moreover, other circuits which have considered this question are unanimous in extending the Hobbs Act to protect intangible, as well as tangible, property. See United States v. Zemek, 634 F.2d 1159 (9th Cir. 1980), cert. denied, 450 U.S. 916, 101 S. Ct. 1359, 67 L. Ed. 2d 341 (1981) (right to solicit business accounts); United States v. Santoni, 585 F.2d 667 (4th Cir. 1978), cert. denied, 440 U.S. 910, 59 L. Ed. 2d 459, 99 S. Ct. 1221 (1979) (right to make business decisions free from outside pressure wrongfully [**40] imposed); United States v. Nadaline, 471 F.2d 340 (5th Cir.), cert. denied, 411 U.S. 951, 36 L. Ed. 2d 414, 93 S. Ct. 1924 (1973) (right to solicit business accounts); United States v. Tropiano, 418 F.2d 1069 (2d Cir. 1969), cert. denied, 397 U.S. 1021, 25 L. Ed. 2d 530, 90 S. Ct. 1258 (1970) (right to solicit business accounts).
Moreover, at least one court has expressly addressed the question of whether rights incident to union membership are protectible property interests. In Dusing v. Nuzzo, 177 Misc. 35, 29 N.Y.S.2d 882 (Sup. Ct. Ulster County), modified on other grounds and aff'd, 263 A.D. 59, 31 N.Y.S.2d 849 (1941), the court held that such rights are "as real and as needful of equitable protection, surely, as money or chattels."
The right to membership in a union is empty if the corresponding right to an election guaranteed with equal solemnity in the fundamental law of the union is denied. If a member has a "property right" in his position on the roster, I think he has an equally enforceable property right in the election of men who will represent him in dealing [**41] with his economic security and collective bargaining where that right exists by virtue of express contract in the language of a union constitution.
29 N.Y.S.2d at 884. This holding is significant because the Hobbs Act's definition of extortion was closely modelled on that in the New York statute and Congress intended that extortion as used in the Hobbs Act reflect the common understanding of the states. See United States v. Enmons, 410 U.S. 396, 406 n.16, 35 L. Ed. 2d 379, 93 S. Ct. 1007 (1973). Thus, we conclude [*282] that the membership's intangible property right to democratic participation in the affairs of their union is properly considered extortable "property" for purposes of the Hobbs Act. n16
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n16 This Court's decision in United States v. Boffa, 688 F.2d 919 (3d Cir. 1982), cert. denied, 460 U.S. 1022, 75 L. Ed. 2d 494, 103 S. Ct. 1272 (1983), does not dictate otherwise. In Boffa, this court held that the RICO predicate act of mail fraud, 18 U.S.C. § 1341, may encompass a scheme to deprive union members of the right to the "honest and faithful" services of union officials as provided in section 501 of the LMRDA, 29 U.S.C. § 501, but may not encompass a scheme to deprive employees of rights created by section 7 of the NLRA, 29 U.S.C. § 157. In Boffa, we rejected the argument that a violation of union rights under section 7 of the NLRA may be characterized as a RICO predicate act because of the "remedial nature of the [NLRA] and the primacy of the National Labor Relations Board in resolving unfair labor practice disputes." 688 F.2d at 927.
However, Boffa's conclusion with regard to section 7 of the NLRA is inapposite here since the NLRB does not have primary jurisdiction over the democratic rights created by section 411 of the LMRDA -- the rights at issue in the present case. Under section 412 of the LMRDA, 29 U.S.C. § 412, union members have a direct cause of action against the union and its officers for infringement of their section 411 rights.
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(2)
The defendants argue, alternatively, that section 530 n17 of the LMRDA, 29 U.S.C. § 530, is the exclusive criminal sanction for violating a union member's rights, and that, therefore, the district court erred in concluding that the extortion of membership LMRDA rights could also constitute a Hobbs Act violation. The defendants maintain that the government may not apply the Hobbs Act in the present RICO context because Section 530 of the LMRDA, which was enacted subsequent to the Hobbs Act and which punishes the same proscribed behavior as the Hobbs Act, preempts the Hobbs Act in this case. See generally Morton v. Mancari, 417 U.S. 535, 41 L. Ed. 2d 290, 94 S. Ct. 2474 (1974) (in certain instances a specific statute governs over a more general one). n18 The government counters that section 530 does not limit the applicability of the Hobbs Act to the facts of the present case because section 530 and the Hobbs Act were designed to prohibit different types of conduct. We are satisfied that, because the underlying purpose and design of section 530 is different from that of the Hobbs Act, section 530 does not supercede the use of the Hobbs [**43] Act in the instant case. While the Hobbs Act, as evidenced by its explicit and unambiguous language, was designed to combat extortion, section 530 of the LMRDA makes no mention of "extortion" and rather appears to focus on prohibiting physical assaults on members in connection with a union's internal affairs are in the exercise of their statutory rights. In this regard, we note that Senator Morse, in opposing the passage of section 530, stated:
Generally speaking, the effect of these provisions is to make assault and battery a Federal crime, but only when it occurs in a union. I have already referred above to the inappropriateness of provisions of this type for the enforcement of the rights of union members.
105 Cong. Rec. 16,389 (1959). The limited reach of section 530 is also demonstrated [*283] by the language of the LMRDA which states that the Act was enacted as "further and supplementary legislation that will afford necessary protection of the rights and interests of employees and the public generally." 29 U.S.C. § 401(b) (emphasis added).
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n17 Section 530 of the LMRDA provides:
It shall be unlawful for any person through the use of force or violence, to restrain, coerce, or intimidate, or attempt to restrain, coerce, or intimidate any member of a labor organization for the purpose of interfering with or preventing the exercise of any right to which he is entitled under the provisions of this chapter. Any person who willfully violates this section shall be fined not more than $1,000 or imprisoned for not more than one year, or both.
29 U.S.C. § 530. [**44]
n18 If the defendants' argument were to succeed, the government would have failed to prove that the Executive Board violated § 1962(b) because, the defendants allege, § 530, the preemptive section, is not a predicate act under RICO. See 18 U.S.C. § 1961(1). In such a case, of course, the Executive Board could not have aided and abetted the Provenzano Group in a violation of the RICO Act.
As the text reveals, we decline to accept this argument. Rather, we hold that in the present context, the Hobbs Act is not displaced by § 530, and hence, the Hobbs Act violations found by the district court satisfy the predicate act requirement of § 1962(b).
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Section 530, in relevant part, prohibits "the use of force or violence, or threat of the use of force or violence, to restrain, coerce, or intimidate. . . any member of a labor organization for the purpose of interfering with or preventing the exercise of any right to which he is entitled under the provisions of this chapter. . . ." 29 U.S.C. § 530. Although this language of section 530 is broad, [**45] and conceivably could cover extortionate conduct, we observe that those cases which have construed section 530 have all involved some form of assault and battery. See